How to distinguish a good Blockchain Project from a Bad One?

When it comes to blockchain projects and cryptocurrencies, follow the one phrase: If an ICO seems too good to be true, it probably is. Doing your own research and homework are probably the best ways to figure out a good ICO from a bad one. Here are some other tips to help you make the right choice.

If you are looking forward to investing in an ICO, there are many options out there. But not all ICOs are good or have an equal probability of getting a success. So, how do you figure whether the ICO you’re planning to invest in is not a scam? Well, to start with, you can look at the elements a good blockchain project must have.

Crucial Elements of a Good ICO

It solves an actual problem

If a project is not solving any real problem of the industry, it is probably not legit. You can check the project whitepaper for details of the problem the project claims to solve and the solution it proposes. If the team itself is unclear about the project purpose or goals, they probably do not have much hope or long-term expectations from it.

It has a real use for blockchain

ICO (Initial Coin Offering) has become a general method for startups to raise funds for their new projects, whether or not they have any real application for the blockchain technology. It is important that the project you are considering for investment must clearly explain how it will be using blockchain to solve a real problem.

It has a revenue model

An ICO project without a real revenue scheme is of no use for investors. If the company cannot specify a future or propose a definite revenue model, it is probably just looking to make quick money from user investments. Invest only in a company that has a clear business plan and revenue vision.

A good team

Last but not the least, only an ICO which has a good team of experienced and professional individuals can achieve success in the long term. Just like any other project, an ICO is made by successful its team. Look carefully for knowledge and experience of individual team members of a blockchain company to figure out their collective worth and to know whether it has the right people to take it to the success.

Apart from the above things, you should research about the ICO token, community, and other possible red flags that may or may not convince you to believe in that particular crypto project.

A good ICO company will never promise you guaranteed returns, as the ICO market is as volatile as the stock market, if not more. It is full of risk. You should invest at your own judgement and understanding. Research is the best thing you can do at this point.

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